These actions are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, April 18, 2025: The Reserve Bank of India (RBI) has imposed a monetary penalty on 3 different banks, which include Punjab National Bank, Kotak Mahindra Bank and IDFC First Bank. These actions are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on Thursday.
1 The Reserve Bank of India (RBI) has, by an order dated April 4, 2025, imposed a monetary penalty of Rs29.60 lakh (Rupees Twenty Nine Lakh Sixty Thousand only) on Punjab National Bank (the bank) for non-compliance with certain directions issued by RBI on ‘Customer Service in Banks’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
The statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty:
The bank levied penal charges for non-maintenance of minimum balance in inoperative accounts.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
2 The Reserve Bank of India (RBI) has, by an order dated April 3, 2025, imposed a monetary penalty of Rs38.60 lakh (Rupees Thirty Eight Lakh Sixty Thousand only) on IDFC First Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
A scrutiny of the bank was carried out by RBI. Based on the supervisory finding of non-compliance with RBI direction stated in the scrutiny report and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found that the following charge against the bank was sustained, warranting imposition of monetary penalty:
The bank failed to undertake requisite Customer Due Diligence process for opening current accounts of certain sole proprietary firms.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
3 The Reserve Bank of India (RBI) has, by an order dated April 11, 2025, imposed a monetary penalty of Rs 61.40 lakh (Rupees Sixty One Lakh Forty Thousand only) on Kotak Mahindra Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Guidelines on Loan System for Delivery of Bank Credit’ and ‘Loans and Advances – Statutory and Other Restrictions’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
The statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
